More details to this question:
I have a share in an inheritance from my great uncle. He died about 30 years ago. He set up a trust of some sort for the farm. The money from the crops went for the care of his second wife. She passed away in April of 2014. The farm goes to auction in August of 2014. The sale of this farm was predicated on her death. She was 102. I've read where the stepped basis is used to calculate capital gains tax. If that qualifies then we owe little to no tax as the auction price of the farm would be the value. If the value is set at my great uncles death then the capital gains tax would be substantial. The family had no option to sell when he died only when she died.
1 ANSWER
Estate Planning Attorney serving Springfield, IL
Partner at
Bellatti, Barton, Cochran & White, LLC
1 Award
The answer to your question will depend on the terms of the trust. If you uncle owned the land or the trust provided that he had certain incidents of ownership or control then the basis in the land was stepped up to his date of death value 30 years ago when he passed away. That alone doesn't help you much due to the huge appreciation in farmland values since that time. In order for a step up in basis at your great aunt's death she would have needed to have certain ownership or control over the trust. Ask a professional to review the trust itself. Then even if it does not qualify for a step up in basis there are still certain ways that you as a beneficiary may be able to avoid the cap gain tax. Be sure to investigate this BEFORE the closing on the farm.
Answered on Jul 29th, 2014 at 2:30 PM